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(Dollars in millions, except per share amounts)
Key business highlights for the second quarter are as follows:
"The industry appears to be entering a modest recovery phase, with second quarter consolidated revenues growing sequentially for the first time in seven quarters, and exceeding our expectations due to better than anticipated volumes," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "Although we are experiencing positive indicators and steady progress, we retain a conservative view of the near-term trajectory for healthcare staffing due to the continued high general unemployment and apprehension in the economic environment. We continue to be positive about the industry's long-term growth prospects and are positioning our service offerings to meet the strategic needs of our clients and their growth and financial objectives."
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In support of its long-term strategy, AMN Healthcare announced earlier today that it has entered into a definitive agreement to acquire the parent company of Nursefinders, Inc. (dba Medfinders), the nation's leading provider of clinical workforce managed services programs. Through its multi-brand strategy, Medfinders also provides travel nurse and allied staffing, locum tenens, physician search services, and home healthcare services, as well as local nurse and allied staffing in support of its managed services programs. The transaction is expected to close in the third quarter of 2010, and additional details of the agreement can be found in a separate press release issued today.
"This acquisition is a natural step in our long-term growth strategy as it directly contributes to the delivery of greater value and innovative workforce solutions to our clients. In addition to enhancing the capabilities of our existing businesses and expanding into new complementary service lines, we will also be able to achieve immediate sales and operating efficiencies. We believe this is the perfect addition to AMN to enhance shareholder value in both the short and long term," added Nowakowski.
Second Quarter 2010 Results
For the second quarter of 2010, revenue was $149 million, a decrease of 25% from prior year and up 4% from prior quarter. Second quarter revenue for the Nurse and Allied staffing segment was $76 million, a decrease of 32% from the same quarter last year and up 1% sequentially. The Locum Tenens staffing segment generated revenue of $65 million, a decrease of 17% from prior year and up 8% sequentially. Second quarter Physician Permanent Placement revenue was $8 million, a decrease of 7% from prior year and up 8% sequentially.
Gross margin in the second quarter of 2010 was 27.6%, an increase of 60 bps from prior year and a decrease of 30 bps compared to the previous quarter. The improvement as compared to the prior year was driven primarily by an increase in gross margin in the Nurse and Allied segment and the increased revenue mix from the higher margin Physician Permanent Placement segment. The decrease as compared to prior quarter was mainly attributable to a decrease in Nurse and Allied gross margin.
Selling, general and administrative ("SG&A") expenses for the second quarter of 2010 were 23% as a percentage of revenue compared to 19% in the same quarter last year. Second quarter SG&A declined by $3 million, or 9%, over the same period in the prior year, and increased by $3 million, or 8%, as compared to the prior quarter, due in part to acquisition-related costs incurred during the quarter.
As of June 30, 2010, cash and cash equivalents totaled $41 million, compared to $27 million as of December 31, 2009. Total term debt outstanding, net of discount, as of June 30, 2010 was $104 million, with no borrowings on the revolver portion of the credit facility.
Business Trends and Outlook
Going into the third quarter, demand continues to trend up slightly across all business lines. With all business segments anticipating sequential improvement in volumes, consolidated revenue is expected to be up 4-6% compared with the second quarter, excluding the impact of any acquisitions. Gross margin is anticipated to remain sequentially steady.
About AMN Healthcare Services
AMN Healthcare Services, Inc. is the nation's largest provider of comprehensive healthcare staffing and workforce solutions. As a leading provider of travel nurse and allied staffing services, locum tenens (temporary physician staffing) and physician permanent placement services, AMN Healthcare recruits and places healthcare professionals on assignments of variable lengths and in permanent positions with clients throughout the United States, ranging from acute-care hospitals and physician practice groups to other healthcare settings. AMN Healthcare also offers flexible, customized workforce management solutions to healthcare organizations through its managed services program and recruitment process outsourcing services. For more information, visit http://www.amnhealthcare.com.
Conference Call on July 29, 2010
AMN Healthcare Services, Inc.'s second quarter 2010 conference call will be held on Thursday, July 29, 2010, at 9:00 a.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare's website at http://amnhealthcare.investorroom.com/presentations. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (800) 553-0326 in the U.S. or (612) 332-0720 internationally. A telephonic replay of the call will be available at 11:00 a.m. Eastern Time on July 30, 2010, and can be accessed until 11:59 p.m. Eastern Time on August 19, 2010, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 163114. Alternatively, a replay of the webcast will be available at the company's website at 11:00 a.m. Eastern Time on July 30, 2010.
Non-GAAP Measures
This earnings release contains certain non-GAAP financial information. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP"), and may be different from non-GAAP measures reported by other companies. From time to time, additional information regarding non-GAAP financial measures may be made available on the company's website at http://www.amnhealthcare.com/investors.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include expectations regarding third quarter demand, revenue and gross margin, the industry's growth prospects and company's positioning, the proposed acquisition's enhancement of the company's existing capabilities and expansion into complementary service lines and its impact on sales and operating efficiencies and on shareholder value. The company based these forward-looking statements on its current expectations and projections about future events. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in the company's Annual Report on Form 10-K for the year ended December 31, 2009 and its other quarterly and periodic reports filed with the SEC. These statements reflect the company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.
Important Information
AMN Healthcare intends to file a proxy statement and other relevant materials with the SEC to obtain shareholder approval of (i) the convertibility of the preferred stock to be issued to Medfinders' shareholders in the acquisition into shares of AMN Healthcare common stock and (ii) the voting rights of such preferred stock (the "Stockholder Approval"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE STOCKHOLDER APPROVAL. The proxy statement, any amendments or supplements to the proxy statement and other relevant documents filed by AMN Healthcare with the SEC will be available free of charge through the web site maintained by the SEC at www.sec.gov or by calling the SEC at telephone number 1-800-SEC-0330. Free copies of these documents may also be obtained from AMN Healthcare's website at www.amnhealthcare.com or by writing to: AMN Healthcare Services, Inc., 12400 High Bluff Drive, Suite 100, San Diego, California 92130, Attention: Investor Relations.
AMN Healthcare and its directors and executive officers are deemed to be participants in the solicitation of proxies from the stockholders of AMN Healthcare in connection with the Stockholder Approval. Information regarding AMN Healthcare's directors and executive officers is included in AMN Healthcare's definitive proxy statement for its 2010 annual meeting of stockholders held on April 14, 2010, which was filed with the SEC on March 12, 2010. Other information regarding the participants in such proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement to be filed in connection with the Stockholder Approval.
% Chg % Chg Q2 Q2 Q1 2010 2009 2010 Revenue $149.3 (25%) 4% Gross Profit $41.2 (23%) 3% Net Income $0.1 (97%) (82%) Diluted Earnings per Share $0.00 NM NM Cash Flow from Operations $6.8 (81%) (42%) Adjusted EBITDA* $9.7 (46%) (7%) Adjusted EPS* $0.02 (88%) NM * See notes (2) and (3) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items. NM - Not meaningful
SOURCE AMN Healthcare Services, Inc.
